Despite overbought conditions, the market closed at a new post-2008 high. The breakout on the $SPX chart is not definitive yet, as it has just edged above the 2012 highs. There seems to be a lot of side-lined money, and a close above 1475 would likely draw some (more) of it into the market.

For the record, a pullback towards $SPX 1430 should alleviate those overbought conditions, and may present a buying opportunity. There is also support at 1450 -- this week's lows.

The standard equity-only put-call ratio (Figure 2) is wavering, and has now rolled over to a sell signal. The weighted ratio is not having any such doubts and is still a buy.

Market breadth has been strong, so the breadth indicators remain on buy signals.

$VIX has now dropped below 14 and -- twice this week -- traded at levels last seen in July 2007. As a result, we are classifying $VIX as being overbought at such low levels.

In summary, the market is overbought, and we expect a correction. However, if $SPX makes strong new highs above 1475, more side-lined buyers may come rushing in, producing a shot at 1500, despite any overbought conditions.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and also publishes several option trading newsletters.